DealBook: Regulators and Hackers Put Bitcoin to the Test

Eric Thayer/Reuters Benjamin Lawsky, New York’s financial services superintendent, is leading efforts to write regulations for virtual currencies. Bitcoin is facing significant growing pains as it struggles to move beyond a stormy adolescence. After months of hype and hysteria that have driven up its price at a dizzying pace, Bitcoin recently encountered several hurdles that are likely to determine whether it makes it out of its early speculative phase to become a currency that people actually use, is supplanted by a rival or falls apart altogether. The most fundamental threat was a bug in some basic software that determines how Bitcoins are moved between digital accounts. That forced several of the largest Bitcoin exchanges to shut down for most of last week and raised questions about the sturdiness of the programming underlying the currency. At the same time, the system ...